Taxpayers have long had alternative methods available from the IRS to pay past-due tax debt, but a new version of the Taxpayer Relief Initiative offers more options.
The IRS says the changes make it easier for families and individuals struggling due to the current pandemic to make payments or find other ways to resolve tax liabilities.
Key offerings of the Taxpayer Relief Initiative
Dealing with the IRS over back-due taxes can be a complicated process and working with an experienced tax law attorney is advisable in many cases. Some of the key provisions of the Taxpayer Relief Initiative include:
- Short-term payment plans have been expanded from 120 days to 180 days
- More flexibility in delaying payments for taxpayers already under a payment plan
- Some new tax amounts can be added to existing installment agreements
- Qualified taxpayers owing less than $250,000 can avoid providing financial statements in some circumstances
- Some individual taxpayers can avoid liens being filed by the IRS if their total tax debt is less than $250,000, including the 2019 tax year
- Some taxpayers with Direct Debit Installment Agreements can use the Online Payment Agreement system to propose lower monthly payments
Other debt management tools are available
The IRS offers additional tools to current payment plans and installment agreements. These include:
- Delayed collections: Taxpayers unable to make payments can request a temporary delay.
- Offer in Compromise: This allows some taxpayers to settle their tax debt for a lesser amount than owed.
- Penalty relief: Assistance is available to mitigate fines over failure to file, pay or deposit penalties. Those receiving first-time penalties can apply for relief.
Determine whether you qualify
The pandemic has caused widespread economic harm to millions of Americans, which means many cannot pay rent or other monthly bills, let alone tax balances. A knowledgeable lawyer can often find the best way to address tax debt cost-effectively, saving families and individuals in the long run rather than trying to navigate this complicated process by themselves.